Supply Chain: What is it and why is it important?

The supply chain is a fundamental part of the business world and plays a crucial role in the success of companies, especially in the manufacturing sector. In this article, we’ll explore what exactly a supply chain is, the different types that exist, and why it’s so important in the manufacturing sector.

supply chain


What is the supply chain?

The supply chain is the set of processes and activities that involve the acquisition, production, storage, and distribution of goods and services, from the initial supplier to the final consumer. It involves the coordination of different factors, such as suppliers, manufacturers, distributors, and retailers, to ensure that products reach the market in an efficient and timely manner. Its main objective is to satisfy the needs of each of the clients.

Companies have various solutions to manage processes optimally, depending on the needs of customers, which is why there are different types of supply chains. The main objective of the supply chain is that the products in quantity, quality, and time have the most competitive cost throughout the process, from the beginning to the final delivery.


Types of supply chains

There are several types of supply chains, and choosing the right type for each company depends on the characteristics and needs of the project. With the emergence of technological advances, new ways of organizing these chains have emerged. They can be classified according to their type of structure. Learn about some of the most common types:

Traditional: In this type of supply chain, each of the component parts works independently. It is mostly used by small companies that do not work in a complex way and that do not need a continuous flow of communication or excessive control in their production. They can generate failures due to communication errors.


Direct: In this supply chain it is easier to organize since only three components are involved: the supplier, the company, and the end customer. Thus, companies can have greater control over their prices and the way they sell to the end customer, in such a way that they generate closer and stronger relationships with their customers.


Strategic: This type of chain requires strategic and meticulous planning of each of the parties that make up the process. It generally focuses on decision-making on the type of technique applied, the agreement with suppliers, or the type of product.


Shared: This supply chain involves different components and most of the decisions are shared. All the people who are involved in this process make their decisions individually, through a database that allows the exchange of information. In such a way that all members have access to the information and an adequate synchronization of each of the parties is required.


Synchronized: In this chain, each of the components of the process is synchronized and it is generally used to work with requests with a high volume of demand. The entire development is monitored until the final product is shipped. When using this process, the appropriate technology is required so that all those involved can access the changes that are being incorporated.


Complex: This type of supply chain is used mostly by high-level companies that manufacture a particular product, so they need a special and different method to develop logistics planning. To properly implement this method, a specific procedure must be generated that breaks down in detail each of the steps to be carried out.


Importance of the supply chain in the manufacturing sector

The supply chain plays a vital role in the manufacturing sector for a number of reasons

Efficiency and cost reduction:

A well-managed supply chain represents greater efficiency and profitability for manufacturing companies. It must be balanced, with a succession of coordinated activities that together acquire a certain complexity. For the process to occur properly, all components must operate correctly and minimize risks.


Quality improvement:

A strong supply chain ensures the delivery of high-quality products to end customers. When there is a continuous flow of information throughout the process, the chain will function dynamically and will perform better thanks to communication.


Demand management:

The supply chain allows you to anticipate and meet demand more effectively, which improves customer satisfaction. Use the appropriate technological tools that help each part of the process of the parties involved in the supply chain.


Innovation and adaptability:

A well-designed supply chain adapts to constantly evolving market trends and the social context. Flexibility in a supply chain has become essential, having agility and rapid response capacity in any situation, the results will be optimal. An example of adversity was the pandemic, where many supply chains collapsed due to having no response to the crisis.

The supply chain is essential in the manufacturing sector, today, thanks to new technologies, the use of Artificial Intelligence, blockchain, and machine learning is being prioritized, to improve the performance of each of the processes, especially in everything. in the more complex strings. By understanding the different types of supply chains and their importance, companies can streamline their operations and gain a competitive advantage in the marketplace.

Effective management of these processes contributes to cost reduction, quality improvement, and adaptation to changing customer demands. A strong supply chain can make the difference between success and failure in the manufacturing sector. At VYNMSA we have the adequate infrastructure for your company to operate successfully and achieve its development objectives. Learn more about us and we will support you in all your doubts.

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